A PUSH to ban hay exports and divert the product back to drought-ravaged NSW and Queensland farmers would kill off export fodder markets that have taken 25 years to develop according to the chief executive of the Australian Fodder Industry Association (AFIA).
John McKew said an entire industry would be wiped out overnight if the social-media led drive to divert hay exports to livestock producers struggling to source feed for their animals was successful.
“It has taken 25 years of investment and resources to get the export fodder sector to where it is today,” Mr McKew said.
“Long term relationships have been built up and the industry has developed well, especially over the last few years, but without continuity of supply that is all wiped out.”
He also said calls to divert the hay to the domestic market were misguided as there was very little uncontracted hay around.
“There may be sheds still full in places but that hay has already been sold, so the exporters have to meet their contractual obligations.”
David Jochinke, vice president of the National Farmers Federation (NFF) said keeping hay from the export market was not good for agriculture in Australia as a whole.
“I’m not keen on anything that means one industry has to sacrifice itself for another,” Mr Jochinke said.
Echoing Mr McKew’s thoughts he said he did not think there was any uncontracted export hay that could go into the domestic market.
“Given where the prices are, I am sure people have been keen to get any excess stocks into the domestic market, anything that is left now is already committed.”
Mr McKew said the export hay business required significant investment.
“Building an export hay processing plant is likely to cost between $20-30 million.”
“It’s a long-term investment and these calls that exporters suddenly give that up are not reasonable.
“Like all export business you cannot just turn things on and off, if we walk away from producing export fodder, we lose a $400 million industry just like that.”
He said the export hay market was not proving an excessive drag on Australian hay supplies.
“The export hay market probably accounts for 10-15 per cent of Australia’s total hay production.”
Mr Jochinke agreed.
“It has only been a sudden and dramatic change in terms of supply and demand, even early this year you could still have your pick of any type of hay you wanted at a very competitive price,” he said.
Mr McKew said given the flood of domestic demand at present even releasing the estimated export stocks yet to hit the water would not have a dramatic impact on supply.
“It would equate to two extra bales of hay per farmer that wants them, so it wouldn’t do much.”
However, both Mr Jochinke and Mr McKew offer a ray of hope for those seeking supply saying new crop fodder would hit the market over coming months.
“We’ll see new crop supply hit the market in October-November,” Mr McKew said.
He said decisions would be made soon on whether to cut grain crops for hay in areas where there was biomass but little subsoil moisture.
“Hay is an attractive option for growers where the season is showing signs of cutting out, it is a case of having a hay crop in hand but a grain crop still being a couple of rains away from being assured.”
Mr Jochinke said new crop hay would come along soon and added that it would be bolstered by new crop grain before too long.
“Grain and hay will be available again relatively shortly, it is hard for guys in drought-impacted areas to see it but there are a lot of areas that are not too bad and that will help replenish fodder and grain stocks to some extent.”
Gregor Heard
Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.
Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.
